The Movement to Smaller Banks
Smaller Banks, Fewer Problems?
With the crash of the mega-banks, more and more Americans are looking away from Citibank, Wells Fargo, and Chase and toward the bank on the corner or other smaller banking options. What can your locally owned bank do for you and your money? What should you look for if you’re planning to move your money and how do you know you’re making a safe and responsible choice? Banking at a local bank keeps money in your community, including business, home and personal loans.
Moving your money out of the big-business bank is becoming a movement. While your small investment may not make a big difference in the future of a large bank, many individuals moving their money can make a significant statement. Visit moveyourmoney.info for more information about this movement.
Once you’ve decided to move your money, do your research. If you visit moveyourmoney.info/find-a-bank you can input your zip code and find a list of Institutional Risk Analytics approved banks. These community banks have received a grade of B or better overall, with a number of relevant factors considered. Use the list of high rated banks in your community to choose the local bank that is right for your needs.
If you prefer to bank with a credit union, you might start your search at ncua.gov/DataServices/FindCU.aspx. You can then check individual credit union ratings at bankrate.com. Another possible resource to help you choose a credit union is CreditCardConnection.org. Credit Card Connection offers a listing of ethical credit card companies, including credit unions. Some credit unions have membership requirements; however, others are more publicly accessible.
Visit well rated locally owned banks in person or on-line to see what sort of services and options they can offer. Smaller banks and credit unions offer the same FDIC insurance as larger banking institutions. Many local banks offer convenient ATM access, on-line banking, and high yield savings accounts and CDs. You might even be able to qualify for a low interest credit card and transfer high interest big bank balances to a lower interest local MasterCard or Visa branded card. Consider your own priorities when bank shopping, whether you need good investment options, easy ATM access, or excellent and easy to use on-line banking.
Banking, even on a smaller local level, is a competitive business, so shop around for the best interest rates and benefits. If you have more significant banking needs, you may find the personal service offered by your local bank especially helpful. You can also count on good customer service and access to upper management if necessary.
Here is a list of some High Yield Checking and Saving Accounts.
I am not a fan of the move your money movement. It is reactionary and often times reacting to past problems sets up the future. Remember in the 1980’s when all the local banks and S&L’s collapsed we had a movement towards big banking.
I just don’t believe moving your money to a smaller bank is inherently better for your money, and it assumes small banks didn’t get into trouble with making risky loans, they did. When a small bank failed no one noticed, but almost 250 small banks failed during this crisis.
I am not advocating for big banks, I am just saying that this reactionary push may not have the intended benefits people are pushing for.
I believe instead of moving money around from financial institution to institution people need to really educate themselves in finance. Learn about how to deal most efficiently with the money you have. Education is the key to taking care of your finances not moving your money to a smaller bank and thinking everything will be fine,
I agree with Jacques – moving to a smaller community bank is a reactionary move that really doesn’t accomplish anything. The parameters are the same – the FDIC will insure the same amounts, you can find good and bad rates at all levels, etc. so there is no inherent benefit. So it goes back to the point of the article which is the “statement.” Well, with the volume of customers and transactions the big banks have, some people moving to smaller banks will have little impact – especially when the desired customer for the big banks is the institutional deposits. However, my biggest question with this article is: what are the numbers. DJ states that “more and more Americans” are looking away from the big banks and that this is “becoming a movement.” Are there any facts to back this up? Or is this just gut feelings and extrapolation from bar chat and watching the talking heads on TV?
I love my credit union, Affinity. Whatever the pros and cons of a trend to move one’s money to small banks, at my personal level I’ve been trying to convince people that credit unions are the way to go for decades. At minimum for one’s personal banking (incl loans for housing, etc), Affinity has always had a shade better interest rates than other safe institutions, has treated me well (even though I don’t earn much money) and has had the simplest, clearest terms for its services. Their commitment (and that of credit unions in general, from what I understand) to not invent fees for any little thing they can get away with has probably saved me tons of money, and saved me from heaps of stress. And the bottom line value of getting everyday financial services through a not for profit organization has incalculable benefits – I feel great about it, especially that my money is more community based than in a big bank. You may be surprised that I agree with the comments that one should not take reactionary actions. But I don’t believe much of the “move your money to small banks” movement is based on that: it’s just that the media hype machine has latched it’s ADD imagination on it temporarily. The underlying principle is old, and it’s sound. Finally, Affinity branches exist in NJ, so if you need a bricks and mortar building near you, I’m sure there are similar credit unions elsewhere. But, with electronic banking and telephone access to customer service (and I’ve never had a bad experience with either since the 80s) I can vouch that should I ever need to move out of state I’d keep my Affinity account. BTW, I’m not on their board, I don’t have relatives employed there, this is an unsolicited, just-felt-like-commenting recommendation. (Tho’, on second thought, if you opened an account and mentioned my name as referring you, I’d enjoy that.affinityfcu.or